Chinese people are likely to pay less in income tax, as China is
amending its tax policies and plans to level up the individual
income tax base from the current 800 yuan (US$97) to 1,500 yuan,
the Wenhui Daily reported yesterday.
Besides raising the tax bases, the new policy will probably enlarge
the tax-free portions and will make the tax collection based on the
yearly incomes, instead of the monthly salaries, the report
said.
"Eight-hundred yuan use to mean a large sum in 1980, when the tax
base was first ruled," Yang Chunping, vice director of Beijing's
taxation bureau, said. "But now, as people's incomes have been
greatly raised, that's really a small sum, and more than 3.2
million Beijingers are paying the income taxes."
But that's unfair, some experts said.
They argued, since tax is a vehicle to narrow the income gaps in a
society, it should mainly aim at the high-income earners and it's
not right to have people with low income and high income taxed on
the same bases.
Meanwhile, to tax people with the same salaries but different
burdens at the same rates is also unfair, they said.
"If one person is married and has a child, while the other remains
single, the first one is obviously more burdened than the latter,"
Ji Zhiming, professor specialized in taxation laws, said.
Similarly, to tax the incomes through different means at the same
rates is not fair, Ji said.
Under the current tax laws, a person earns 27,000 yuan from the
work should be levied up to 45 percent income tax, while another
one who makes the same income by renting out the properties will
only pay a 20-percent tax.
To
make the tax laws fair to everyone and to prevent tax-cheaters as
well, experts suggest China should set up a tax record system as
many other countries do to track all the incomes and expenses of a
person.
"China is in study of how to link a person's tax record with the ID
card system," Yang said.
(eastday.com October 26,
2001)